01—Abstract
Summary
Summary of the 10-K/A filed September 10, 2014. Cited figures are marked; the original filing is the authoritative source.
NRG Energy, Inc. reported a net loss attributable to NRG Energy, Inc. of $386 milliona for 2013, compared with net income of $295 million in 2012.
Operating revenues rose to $11.30 billionb from $8.42 billion, while operating income fell to $343 million from $350 million. The results were weighed down by a $459 million impairment loss on Indian River, a $92 million impairment on the Gladstone equity investment, and interest expense of $848 million. Total assets were $33.90 billion at December 31, 2013, with total long-term debt and capital leases of $16.82 billion.
KPMG LLP issued an unqualified opinion on the financial statements and an effective opinion on internal control over financial reporting. The company's pending acquisition of Edison Mission Energy (EME) for an aggregate purchase price of $2.6 billionc, subject to adjustment, is a central item in the filing. NRG expects to fund the net cash portion with cash on hand, including $1.1 billion of acquired cash, and about $700 million of new corporate debt, and to assume about $1.5 billion of non-recourse project debt.
In January 2014 NRG issued $1.1 billiond of 6.25% senior notes due 2022, partly to redeem 2019 notes and partly to fund the EME deal. Operating cash flow was $1.27 billion in 2013 against capital expenditures of $1.99 billion.
The filing also details ongoing contingencies, including the Louisiana Generating Consent Decree, Maryland ash facility litigation settled by consent decree in April 2013, and the Cheswick class action. Common dividends increased to $0.48 per share annualized in 2013, and the company repurchased only $25 million of stock under its $200 million 2013 program because of the pending EME acquisition.
02—Key points
Key Highlights
- Net loss attributable to NRG Energy, Inc. of $386 million in 2013, versus net income of $295 million in 2012
- Operating revenues of $11.30 billion, up from $8.42 billion in 2012, with the Retail segment contributing $6.24 billion
- Impairment losses of $459 million on Indian River and $92 million on the Gladstone equity investment in 2013
- Pending acquisition of Edison Mission Energy for an aggregate purchase price of $2.6 billion, expected to be funded with cash on hand, about $700 million of new corporate debt, and assumed project debt of about $1.5 billion
- Total assets of $33.90 billion and long-term debt and capital leases of $16.82 billion at December 31, 2013
- Net cash provided by operating activities of $1.27 billion, against capital expenditures of $1.99 billion
- Quarterly common dividend increased during 2013, reaching $0.12 per share per quarter, with $0.45 per share paid for the year
03—Questions
Frequently Asked Questions
Why did NRG report a net loss in 2013 after a profit in 2012?
The filing shows a net loss attributable to NRG Energy, Inc. of $386 million in 2013 versus net income of $295 million in 2012. The main drivers include a $459 million impairment loss on the Indian River plant, a $92 million impairment on the Gladstone investment, and interest expense rising to $848 million from $661 million. The 2012 results also included a $296 million bargain purchase gain related to the GenOn acquisition, which did not recur.
How is NRG financing the pending Edison Mission Energy acquisition?
The filing states an aggregate purchase price of $2.6 billion, subject to adjustment, of which 12,671,977 shares of NRG common stock are valued at $350 million, with the balance in cash. NRG expects to fund the net cash portion using cash on hand, including $1.1 billion of acquired cash, and about $700 million of newly issued corporate debt. It also expects to assume about $1.5 billion of non-recourse project debt. The filing notes there are no assurances the acquisition will be completed on the agreed terms.
What are the largest asset impairments NRG recorded in 2013?
NRG recorded a $459 million impairment loss on Indian River in the fourth quarter of 2013, after revised long-term power and fuel price views reduced projected profitability. It also recorded a $92 million impairment on its 37.5% interest in the Gladstone power station in Australia, which it concluded was other than temporary.
How did NRG's dividend and share repurchase activity change?
NRG increased its annual common dividend by 33% to $0.48 per share in 2013, paying $0.09 in the first quarter and $0.12 in each of the following quarters. Under its 2013 Capital Allocation Program, NRG repurchased 972,292 shares for about $25 million in the first quarter. Because of the proposed EME acquisition, it did not complete the remaining $175 million of authorized repurchases.
04—Continue